Student debt could be hurting housing recovery: Washington Post

We’ve written before about the issue of student-loan debt and how it’s having a negative effect on real estate. (See here and here.) Now the Washington Post has written a story on the issue, “Student debt may hurt housing recovery by hampering first-time buyers.”

“The growing student loan burden,” it writes, “threatens to undermine the housing recovery’s momentum by discouraging, or even blocking, a generation of potential buyers from purchasing their first homes.”

It’s based on analysis by the Mortgage Bankers Association that found mortgage applications have dropped almost percent since October compared with the year before.

The fear is that many young adults can no longer save for a down payment or qualify for a mortgage, impeding the housing market and the overall economy.

At issue is the debt-to-income ratio for a prospective buyer, which (in order to get the best rates) can’t exceed 43 percent of income. A $100 per month student-loan payment, the article points out, could tip the balance against a recent grad looking for a mortgage for a first home.

The whole article has the details and is well worth a read — click here to do just that.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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One Response to Student debt could be hurting housing recovery: Washington Post

  1. It is getting more and more a problem that new home buyers that have student loans can not get a mortgage. I fear that this will lower the incentive to get a student loan to go to collage. It seems to be lowering the benefits. The job market is not paying enough when the students finish school to make up for the student loan they had to take out.

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